Tighter emissions control standards next challenge for oil and gas industry in Weld

Operators monitor various oil and gas sites while inside the Anadarko control center in Evans on Friday. At the central dispatch center technicians can monitor every well in Weld County and shut each one down if a problem exists.

Field coordinator Jesse Spradlin looks over a well site while near the town of Platteville on Friday. If any problems occur at the Anadrako's well sites field technician are dispatched for quick response times.

Emissions violations

According to the Colorado Air Compliance Tracking and Inventory System, in the first quarter of the year, there were 98 notices to companies for noncompliance with state emissions regulation standards in Colorado, seven of which were in Weld County, and four of which received penalties:

2012 penalties assessed

Throughout 2012, companies operating in Weld paid out $265,624 in penalties for air quality violations, 6.7 percent of the statewide total of $3.94 million.

In Weld County, the highest penalties were paid by:

» Noble Energy, $81,390

» PDC Energy, $55,480

» Encana Oil and Gas, $54,304

» Kerr-McGee, $19,800

Source: Air Quality Control Division of the Colorado Department of Public Health and Environment, online reports.

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Julie Boyle and her husband plan to move away from Weld County as soon as they can.

Not because of finances. Not because of better opportunities. They’ve just had enough of their neighbors — 20 oil and gas facilities that surround their home north of Gill.

“We’re outta here,” said Boyle, who plans to move to their second home in Lyons as soon as finances permit in the next year or two.

Boyle is a hardy member of the newly formed Weld Air and Water, a group of residents advocating for health and safety amid oil and gas exploration in the county.

She can’t definitively point to oil and gas for the increase in nosebleeds she’s had in the last year. She also can’t say the industry and the nearby wells and tank batteries are the sole reason for her increased sinus problems in the last five years.

But she said she also can’t discount the connection when the smell and sounds of the tank battery near her house chase her out of her garden or off her bike route.

“I’m pretty convinced this probably has a negative impact, but I want some studies (done). We need data, and I want to see that,” said Boyle, who moved to Gill in 1997, when only a handful of oil and gas facilities shared her space.

The Air Quality Control Commission under the Colorado Department of Public Health and Environment is considering tougher regulations requiring stricter maintenance and reporting procedures on the industry, which already is required to control 95 percent of fugitive emissions from their equipment in the field.

Public comments are being accepted now and, come August, a formal proposal may come about — the fifth time in the last eight years that the state has tightened emissions control standards on the industry. Some believe the industry can capture 98 percent of its emissions.

Weld Air and Water members plan to play a role in the process.

“The requirements that we’ve had have been very successful at minimizing air emissions from the oil and gas industry and other industrial sectors,” Will Allison, director of the Colorado Air Quality Control Commission, said. “But we’re seeing tremendous growth projected for the industry. We want proactive regulations that can enable us to meet that growth.”

That could mean increasing reporting requirements, documenting possible fugitive emissions at every juncture and more regular maintenance with stronger technologies, to name a few — things many in the industry say they already do on their own.

Industry insiders say they, too, are concerned about the environment, and they already go above and beyond current regulations to keep air and water clean.

“We all live here, and breathe the air and drink the water and want to go home safely,” said Korby Bracken, director of environmental health and safety for Anadarko Petroleum Corp., one of Weld’s two biggest operators with roughly 5,300 wells in the field today. “We’re doing our part to help protect things we enjoy every day. What we do in the fields is not because of rules and regulations in place. It’s because it’s the right thing to do.”

Health concerns

The main concern is about what’s called volatile organic compounds unique to the oil and gas industry that contribute to ozone pollution, a chief component of smog.

“About half of all VOC emissions in the state have origins in the oil and gas sector,” said Dan Grossman, regional director for Environmental Defense Fund’s Rocky Mountain office in Boulder. “It’s our belief that if you look at the relationships between increasing activity, and emissions, it’s consistent. As oil and gas goes up, VOC emissions go up. It’s common sense.”

A recent study by the Cooperative Institute for Research in Environmental Sciences in Boulder showed that in 550 air samples taken at an air monitoring station in Erie, in the southwestern-most part of Weld, oil and gas was responsible for 55 percent of the hydrocarbons that contribute to ozone formation in that area.

But there are two sides to every debate.

Industry officials say that oil and gas production is just one of many polluters out there, and shouldn’t be looked to as the only source to curtail.

Another component of smog is what is called Nox, or nitrogen oxides, explained Bracken at Anadarko.

“When the state goes through and determines the sources, they’re finding that our problem in the Denver metro area isn’t so much VOC, but Nox from combustion sources,” Bracken said. Those sources include cars, trucks, semis and tractors. Every time someone paints their house, or mows their yard, they contribute.

In Denver, it’s called “chemical soup,” he explained.

“There are so many emissions sources here in the Front Range that contribute to VOC. Oil and gas is one of many, many, many,” Bracken said. “Vehicles, unburned gas that comes out of the tail pipe, or when you’re fueling a car, that’s a source of reactive VOCs right there. The power plants, the refinery, there’s a lot of abandoned mines near Erie. There’s natural methane seeping out of the ground.”

Despite all of it, even the growth in Colorado’s oil and gas industry, smog levels have remained steady, said Robin Olsen, spokeswoman for Anadarko in Denver.

Anadarko is a backer of a forthcoming University of Texas study that shows oil and gas emissions nationwide aren’t as high as previously thought.

But for every study there’s another one that shows the opposite, and disagreement abounds at every turn.

“The oil and gas sector is the predominant contributor to ozone, but it’s not an excuse not to look at other sources,” Grossman said. “The power sector has its load to bear, and we need to do more around vehicle emissions.”

Indeed, emissions control violations the state department of health levied in 2012 showed Weld County sources – albeit mostly oil and gas sources — were just 6.7 percent of the statewide penalties, and while most violators were oil and gas companies, power plants, asphalt-paving operations, agricultural operations and other industrial operations also were among those cited.

Current controls

The oil and gas industry already is controlled pretty heavily. Controls get tougher every year, which prompts many companies to be proactive and reach beyond the regulations.

“The industry has been very proactive. We’re under regulations continually. (Opponents of the industry) act like we’re uncontrolled, and that’s so far from the truth it’s unbelievable,” said Ed Holloway, CEO and president of Synergy Resources Corp., one of the smaller oil and gas exploration companies in Weld County. “We go beyond the call of duty to make sure we’re compliant.”

The oil and gas industry already is required by the state to have emissions-control devices on their tanks and batteries. They have vapor recovery units on batteries and do flaring of gas rather than let it seep into the atmosphere.

But there are tiny sources, such as leaky seals that erode on a regular basis, or times when hatches on batteries — called thief hatches — are open that fugitive emissions are released, that make the capture of all emissions impossible. State standards require the industry to capture 95 percent of emissions from their equipment.

“Every year the compliance changes,” Holloway said. “And it’s difficult to stay on top of because you’re dealing with human beings and equipment (that can fail).”

Companies must calculate their emissions based on a specific formula from the EPA, and report those numbers annually to the state. It behooves them to stay within dictated emissions thresholds.

State inspections are always on the horizon, threatening $15,000 per day fines on operators who aren’t compliant for a host of things ranging from actual violations to failing to document and report the emissions control efforts.

Holloway said companies stand to get dinged with fines at every turn if they’re not vigilant.

“With our incinerators, we have pilot lights,” Holloway said as an example of the tight regulations. “If a major storm comes through and one of those pilot lights goes out and the incinerators don’t work, that’s a violation and you get fined.”

Craig Mulica, a project manager/geologist with CGRS Inc. in Fort Collins, who inspects oil and gas facilities for many companies, said current regulations are strong and are not taken lightly. The fines are a way to ensure that.

“The (state) does work with the operators. They’re not trying to make (enforcement) their main income, but they want to get the point across that this is serious, and not something that will be taken lightly,” Mulica said.

Best practices

Companies like Anadarko, Noble Energy and PDC Energy, Weld’s three biggest oil and gas producers, have full environmental programs in-house.

Through a central command center at Anadarko, for example, technicians monitor every well. The set up resembles the set of “War Games” as technicians are housed in front of several television screens.

There are no video cameras, but devices monitor operation parameters at each well location. A typical site will have pressure monitoring devices that show the pressure on the well. Technicians can monitor the liquid levels in a tank and make sure they’re not overfilling. They also monitor the emissions control devices, or the flares and vapor recovery units. They can determine if there’s a flame, or if the equipment is working efficiently.

“All that data is captured every five seconds and transmitted back to the central dispatch center,” Bracken said. “Operators can sit in front of a computer and look at the field as a whole, or individual wells. They look at how that well is behaving, where it is in its cycle, they can click a button and shut down the facility. It isolates the facility from any sort of potential issue around it,” such as grass fires.

Immediately upon detecting a problem, operators dispatch the problem to the field technicians to correct it. If a seal is leaking, causing pressures to drop, or emissions to flow, they can be on top of it in a matter of minutes.

Synergy, based out of Platteville, doesn’t have quite the resources for a command center. The company outsources its environmental dealings to CGRS.

Mulica takes infrared cameras out to the field and inspects every well quarterly, tagging problem equipment to alert Synergy technicians and operators, who inspect wells daily — none of which is required by the state. New regulations could require annual infrared camera inspections.

Smaller companies, and even larger ones, really are concerned about those $15,000 daily fines they face.

“There’s a lot of smaller operators with less than 100 tank batteries, and that could really cut into their bottom line,” Mulica said.

Grossman of the Environmental Defense Fund said some companies do a good job of policing themselves.

“Some operators are doing very well, but a lot aren’t,” Grossman said. “By setting clear standards in place, we can level the playing field to make sure we’re doing everything we can.”

Change is in the air

With proposed changes in the Air Quality Control standards at the state, some oil and gas companies may push back — not so much for the costs associated with it but the added layers of bureaucracy.

But other proposed changes may make it quite cumbersome on the industry, enough to derail their current efforts to keep tabs on their equipment to control emissions.

A big culprit in the field for fugitive emissions is the “thief hatch,” which has to be opened daily, sometimes many times a day, to fill or drain tank batteries. The state began cracking down on leaky thief hatches in May.

But one proposal to combat the thief hatch issue is just too much, said Rhonda Sandquist, office manager for the 16-employee Synergy Resources.

The idea is to document each and every time a thief hatch is opened, the duration of which it was opened, and everyone involved in opening it must sign off.

Imagine having to document each time you pick up the phone in the office, then document the time you spent on the call, who you talked to, the reasons for the discussion, then having the person on the other end sign off on all of it. Then keep accurate records of every call and report them regularly to your boss.

“Some of these things they’re requiring us to do are going to be almost impossible,” Sandquist said.

But there are good changes in the proposal, too, she said.

“There’s a whole new maintenance section,” she said. “To go out and make sure everything is working correctly is really important.”

Allison said many of the changes will put all operators on the same playing field, as opposed to now, where only those operators within what’s called the 8-hour Ozone Control Area (essentially, an area stretching from Wellington to Castle Rock in length and to east Weld County must comply.

Requirements also would force operators to install the latest emissions control technologies, which most do anyway, but it would be applied across the board.

“They would be a change for the industry, but we believe that the things we’re looking at make sense and are effective,” said Allison of the AQCC. “The technology and business practices exist today and we’d like to encourage more widespread use on a level playing field across the state.”

Bracken said tightening regulations may do more harm than good by taking away the incentives for companies to institute best practices.

“We’re spending so much money to comply with rules and regulations in staff, it takes away those dollars to put on more vapor recovery units, or automation and modernization,” Bracken said.

Boyle, the resident from Gill, said while she respects companies’ right to drill, she doesn’t want it at the expense of her health. If increased regulations can stem their share of the pollution, cost should be no concern, she said.

“I know it would be an extra cost to the industry, and I’m perfectly willing to spend a little more for the petrochemicals I purchase to cover those costs,” she said.